Globalization, Inequality, Convergence, Divergence

Indonesia has one of the highest rates of income inequality in Southeast Asia, according to the World Bank. Credit: Sandra Siagian/IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Jul 26 2018 (IPS)

Economic divergence among countries and regions was never pre-ordained. According to the late cliometrician Angus Madison and other economic historians, the great divergence between the global North and South, between developed and developing countries, began around five centuries ago, from the beginning of the European, particularly Iberian colonial conquests.

From about two centuries ago, around the time of the Industrial Revolution, divergence accelerated with uneven productivity advances. During the 20th century, national level inequalities went down in many developed countries in the period after the First World War until around the 1970s with the rise of labour, peasant and other popular mobilizations.

Inequality, not only at the national level, but also at the international level, seems to affect the pattern of aggregate demand, particularly in developing countries, which in turn influences future investment and growth prospects and patterns.

Thus, the immediate post-Second World War period saw relatively high growth during what some Anglophone economists call the ‘Golden Age’, due to a combination of Keynesian policies at the national level in developed economies, and partially successful development policies in many newly-independent countries of Asia and Africa. However, this eventually came to an end in the 1970s for a variety of reasons.

Recent trends
Since then, inequalities have begun to grow again at the national level in many countries, but international divergence has declined in more recent decades. This recent convergence is due to significantly accelerated growth in some developing countries as expansion in some developed countries slowed. Among developing countries, growth was initially largely confined to East Asia and, to a lesser extent, South Asia, bypassing much of the rest of Asia, Africa and Latin America.

Africa suffered a quarter-century of stagnation from the late 1970s until the beginning of this century when commodity prices rose once again and China began investing in the continent. There was at least one lost decade in Latin America in the 1980s, and arguably, a second one for many on the continent in the following decade.

Such variation needs to be recognized. The recent convergence overall obscures very mixed phenomena of greater national-level inequalities in many economies, but also some international convergence due to more rapid growth in some major developing economies.

However, this convergence has begun to slow again, following the collapse of commodity prices since late 2014. This initially began with petroleum, but eventually affected almost all other commodities, especially mineral prices, slowing the decade of growth in Africa.

The recent phenomena which many term globalization are often linked to international economic liberalization, but the strengthening of property rights has also been important. This has not only consolidated traditional property rights, but also extended property rights in novel ways, e.g., ostensibly to clarify supposedly ambiguous entitlements.

These have involved not only national legislation, but also free trade agreements and investment treaties at the international level, e.g., to consolidate ostensible asset-related entitlements, including so called intellectual property rights.

While few economic commentators may openly advocate increasing inequality, or blatantly espouse divergence, the consequences of many policies and positions associated with the conventional wisdom tend to increase divergence. For example, agricultural trade liberalization has undermined productive potential as only rich countries can afford subsidies, which most developing countries cannot afford.

For a long time, Africa used to be a net food exporter until the 1980s. Since then, it has become a net food importer. With trade liberalization, Africa was supposed to realize its true potential. Instead, Africa has lost much of its existing productive potential, not only in manufacturing, but also in agriculture.

To make matters worse, African farmers cannot compete with subsidized food imports from the EU and the USA. For example, as US consumers have a strong preference for chicken breasts, wings and legs from the US are not only flooding the Americas, but increasingly, Africa and Asia.

Convergence prospects
It is also important to consider the prospects for possible convergence in the long term due to the increased availability and affordability of capital. Besides recent Chinese international financing initiatives, quantitative easing, other unconventional monetary policies, recycling of petrodollars and private East Asian capital, as well as novel, and often illicit international financial flows may transform the horizon of possibilities.

Not unlike the Cold War and the aftermath of 9/11, the resurgence of European ethno-populism in reaction to growing economically and politically driven immigration into developed Western economies has reminded the world of the squalid conditions still prevailing in much of the global South, especially in Africa.

Perhaps more importantly, geography, rather than class, is increasingly viewed by many as the major determinant of income and welfare levels, with vastly different living standards associated with location rather than educational qualifications, occupation or productivity.

Thus, without the prospect of rapid convergence, not only nationally between wealth classes, but also internationally between rich and poor nations, the failure of economic globalization to deliver on its implicit promise of liberalizing cross-border human migration will haunt international relations, human rights and political liberalism for some time to come.

Educating Girls, The Only Road To Achieve the SDGs

More girls in rural Bihar, India are going to school after mini-grid-powered household lights give mothers and children two extra hours of evening work and study time. Experts say that when girls receive prolonged education this reduces HIV prevalence, child marriages and sexual violence. Credit: Manipadma Jena/IPS

By Carmen Arroyo

Better and prolonged education can bring down high rates of illiteracy, sexual abuse and early marriage among girls.

“When girls stay in school, HIV goes down, child marriages go down and sexual violence goes down,” shared Alice Albright, chief executive officer of Global Partnership for Education, a multi-stakeholder partnership and funding platform that aims to strengthen education systems in developing countries.

She was speaking at the side event ‘Keeping girls in school: What impact on the fight against HIV, tuberculosis and malaria?’, during the 2018 High-Level Political Forum on Sustainable Development at the United Nations Headquarters in New York, this July.

Agreeing with Albright, the spokesperson from the international NGO Camfed, or Campaign for Female Education, told IPS: “the cycle of poverty and ill health is perpetuated when girls don’t have access to quality education.”

The relationship between health and education among females has long concerned member states as an issue to address using the Sustainable Development Goals (SDGs) by 2030. The panel, which included Brian Flynn, deputy permanent representative of Ireland to the U.N.; Jens Frølich Holte, deputy minister, ministry of foreign affairs from Norway; Marijke Wijnroks, chief of staff at the Global Fund; Sonita Alizadeh, champion, Girls not Brides; Mohamed Sidibay, a youth representative; and Albright, emphasised a critical issue: keeping girls in school.

The U.N. Women’s report ‘Turning Promises into Action: Gender Equality in the 2030 Agenda for Sustainable Action’ revealed that 15 million primary-school age girls don’t learn to read or write in school (10 million boys don’t either); 15 million girls between the ages of 15 and 19 have been forced sexually; and 750 million women were married before they turned 18. These numbers can only go down with better and prolonged education, highlighted Albright.

Issues like child marriage, sexual abuse, lack of healthcare products, and responsibility for household chores create a greater disparity between boys and girls when it comes to education.

For Camfed, the reason these issues affect boys and girls differently seemed obvious. “Girls are different from boys in their level of vulnerability to sexual exploitation, especially in a context of rural poverty, where pressure to have transactional sex to raise money for food and school going costs can result in life threatening infections, early pregnancy, the life threatening complications resulting from this, early marriage, and domestic violence.”

With 2.4 million women between the ages of 15 and 24 living with HIV, addressing this issue seems more urgent than ever for political leaders.

“Girls and young women face widespread social, cultural, political and structural barriers in accessing their right to health, particularly around sexual and reproductive health and rights,” Nazneen Damji, U.N. Women policy advisor, stated.

A year of education can change a girl’s life completely. According to the U.N. Children’s Fund (UNICEF), an extra year of secondary school can increase a woman’s income by 15 percent in the future, generating a virtuous cycle. However, it is very hard for a girl to access that extra year. She would have less time to study, as her household chores might occupy most of her time and families will count on her daily work, which can be interrupted if she attends school.

“Secondary schools are few and far between in rural areas, and the long and tiring walk to school can also be dangerous for girls (sexual exploitation, dangerous rivers to cross, wild animals). In addition, most schools in rural sub-Saharan Africa are ill equipped to support girls while they are menstruating,” the UNICEF spokesperson told IPS when asked what other obstacles a girl child has to overcome to access education.

But once that education is accessed, the consequences are hugely beneficial.

“We know that educating girls, especially adolescent girls, creates cascading benefits, producing a ripple effect,” explained the UNICEF spokesperson.

“Educated girls are less likely to marry or have children early; they are better able to protect themselves from HIV and AIDS, from sexual exploitation and abuse. Educated women are far less likely to die in childbirth and far more likely to have healthy babies who survive their infancy and thrive,” he added.

Safeena Husain, founder of Educate Girls, an NGO in India that has helped 200,000 girls to return to school since 2007, also shared her organisation’s experience with girls’ education with IPS.

“We do see that with more girls in school they are getting married later. These educated girls feel empowered to make informed decisions and stand up for their rights,” she said.

As an example, Husain commented: “Some girls who we managed to enrol and stay in school through primary education made a conscious decision to call off their engagement to boys who were less educated. It’s a brave move for a girl living in a rural, patriarchal society where she has seen women covered under the veil all her life.”

Most importantly for her, the effects of education are long-term and affect society as a whole.

“The big multiplier effect with educating girls is that they will become the decision makers of the future. It will be the women who choose how to look after the next generation and if they know how to look after themselves during pregnancy, and when bringing up their children there will be an immediate impact on the health of the next generation,” she said.

What can be done?

As to who should be the stakeholder leading these changes in girls’ education, the answers vary. National governments, civil society groups and the private sector—through investments—all have a role to play.

For the UNICEF spokesperson, the key lies within national political leadership.

“We help countries build stronger education systems that deliver quality education to boys and girls,” he said, adding that making sure that national education plans and policies consider gender was key to ensuring that girls and boys alike enter and succeed at school.

Gender could be taken into account, he explained, by removing gender stereotypes from learning materials or educating teachers on the importance of gender biases.

Damji, from U.N. Women, believes civil society is crucial. While Camfed believes that both governments and civil society must interact: “Policy needs to be driven by the expertise of girls and young women who face these barriers, and we need local coalitions to break them down, holistically, with all duty bearers involved: parents, schools, local and traditional leaders, local and national education authorities, social and health workers,” the Camfed spokesperson concluded.

It is Hussain, from Educate Girls, who advocates for the collaboration between these three political actors, including the firms and enterprises.

“The private sector can bring funding and a risk-taking appetite to help fuel innovation and evidence building about what works. Civil society is closest to where the problems lie, they have the community access and know the community voice.

“Once solutions have been found, real scale will only happen when the government gets involved and either integrates the change into policy or funds the delivery of solutions at scale.”

When asked whose responsibility is it to lead the change, she replied: “Essentially it is the responsibility of everyone.”